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KFM Weekly Investment Update: Friday, 28 September 2018

  • According to Deputy Prime Minister and Treasurer Hon. Charles Abel,
    the major development challenge for the current government is on how
    to translate the country’s potential wealth from its natural resources to
    tangible benefits for more than 90.0% of the people who live in rural
    areas and the upcoming Asia Pacific Economic Cooperation is a great
    opportunity to showcase PNG’s potential for development
  • The Australian and PNG Governments are progressing to deliver a new
    high-speed Coral Sea Cable that will connect Port Moresby to the global
    economy through Sydney. A marine survey vessel called the RV
    Northern Endeavour is currently in Port Moresby to assess the area
    where the cable will run through to the country. Australian High
    Commissioner to PNG Mr Bruce Davis said Australia is delighted to
    partner with PNG in delivering this key nation-building project which has
    the potential to be truly transformative. He added that the preliminary
    planning and installation of the cable is efficient, cost-effective as
    possible and also provides assurance that the impact of the cable on
    PNG’s pristine marine environment is minimal
  • According to the Regional Director of Digicel Pacific, Mr Paul Statham,
    the company plans to expand its offerings when the submarine fibre
    cable from Australia to PNG is built. The plan was to build out metro fibre
    across the major towns of PNG to leverage its network. Mr Statham also
    said Digicel plans to introduce cloud services which he believes will be
    of great benefit to businesses in the country
  • Main partner for the Ramu 2 Hydro-Electricity Project, Shenzhen
    Energy’s President Mr Wang Pingyang said the project should take 69
    months to complete and be in commercial operation by 2024. Shenzhen
    Energy also has the capacity to venture into other power generated
    activities in the country. The project will be a private-public partnership
    venture with Shenzhen Energy holding 70.0% while the Government,
    landowners and Provincial Governments hold 30.0%. After completion,
    Shenzhen Energy will manage it for 25 years, then hand it over to the
    PNG Government
  • The National Superannuation Fund (Nasfund) has a total investment
    value of K300.0m in Lae, Morobe Province which represents 7.0% of the
    fund’s value. Lae holds the second largest membership base with over
    300 employers and 40,000 memberships (10.0% of total membership).
    Board Chairman Mr Hulala Tokome spoke to the Lae Business
    Community during a function after the Board meeting on the importance
    of Lae relating to the scale of the superannuation’s investments value.
    The investments scale value consists of Amalpack (K10.0m),
    Hornibrooks (K18.0m), Zenag (K20.0m) and Mainland Holdings
    (K200.0m including properties). The Board also approved an updated 5-
    year plan 2019-2023 which will be implemented next year
  • This week’s BPNG auction in Central Bank Bills were under-subscribed
    by K209.50m out of the total amount offered K816.10m. This indicated
    that there was a decrease in appetite for shorter dated securities. The
    weighted average yield for 28 days and 63 days were at 1.40% and
    2.35% from the previous week. There were no bids for 63 and 182 days
  • This week’s BPNG auction in Treasury Bills were over-subscribed by
    K203.81m out of the total amount offered K263.55m. This indicated an
    appetite for longer dated securities. The weighted average yields for 91,
    182, 273 and 364 days remained unchanged at 2.39%, 4.73%, 6.76%
    and 8.07% respectively from the previous week. There were no bids for
    63 days
  • The KSi and KSi Home Index both advanced for the week by 1.2% and
    1.7% to end at 5,497.99 and 11,490.97 points respectively mainly
    attributed to the rise in share prices of Bank South Pacific and Oil Search
    by 1.8% and 2.4% to close at K10.31 and K 21.50 respectively

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